Key Stats for SAP Stock
- Price change for SAP stock: 9%
- $SAP Stock Price as of Jul. 24: $160
- 52-Week High: $299
- $SAP Stock Price Target: $245
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What Happened?
SAP (SAP) delivered a solid Q2, and it’s fueling the move in SAP stock. Total non-IFRS revenue came in at €9.9 billion ($11.5 billion), up 9% year over year, ahead of the $11.4 billion analysts expected.
Non-IFRS EPS was €1.59 ($1.85), up 6% from a year ago, though it landed below the $2 consensus estimate.
The real story is the cloud business, which rose 22% to €6.3 billion, and the Cloud ERP Suite alone grew 25% to €5.5 billion.
Current cloud backlog, which shows contracted future cloud revenue, reached €22.9 billion, up 26% year over year.
That backlog growth matters because it tells investors how much cloud revenue is already locked in for the future.
Not everything grew, though.
- Software licenses and support revenue fell 9% to €2.6 billion, and
- Services revenue dipped 3% to €1 billion, as the company shifts resources toward AI development instead.
Profitability held up well too. Non-IFRS gross profit rose 9% to €7.3 billion, and operating profit increased 7% to €2.7 billion, even as operating margin slipped slightly to 27.8%.
Cash generation was a bright spot, with operating cash flow up 22% to €3.2 billion and free cash flow up 27% to €3 billion.
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What the Market Is Telling Us About SAP Stock
SAP’s AI strategy is a big piece of why SAP stock is getting attention. Management is leaning into what it calls the Autonomous Enterprise, combining its Business AI Platform with core enterprise applications across finance, supply chain, HR and procurement.
Because this AI runs on SAP’s own enterprise data, the company believes it has an edge over AI tools built without that business context.
The company also kept most of its full-year guidance intact, still expecting cloud revenue between €25.8 billion and €26.2 billion. It did trim its operating profit outlook slightly, from €11.9 billion-€12.3 billion to €11.8 billion-€12.2 billion, mainly due to the recently closed Dremio and Prior Labs acquisitions.
SAP also kept buying back stock, repurchasing more than 16 million shares worth about €2.6 billion under its €10 billion buyback program.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
